Grounds/Reasons for the Written Questions

Chapter 9.       There are over 100 voluminous 'Submissions', 'Reviews', 'Reports', 'Discussion Papers', 'Staff Working Papers' and 'Enquiries' in Australia in the last 10 years on Credit Cards.  None have identified the 'Fundamental Information', namely the percentage and aggregate that Interest and Penalty Fees contribution to aggregate Card Issuers' annual revenue. 

                         Credit Card Issuers and Credit Card Networks on the Wholesale Supply Side have done a masterful job in concealing the overwhelming returns from Interest and Penalty Fees and which Financial Literacy Demographic Quintiles of Credit Cardholders are paying it

                         The Reserve Bank can require Australian banks to provide any financial data to the Reserve Bank that it wants to appraise  -  "any financial data"
Reserve Bank has failed to draw upon its Extensive Powers and Responsibilities to (All) Australians to require major Credit Card Issuers (Four Pillars ) to provide financial information for Credit Card Products that identify cohort/s of Credit Cardholders that have paid an excessive burden of Interest And Late Payments Fees (Chapter 9 and Question 9), even after the Reserve Bank identified the material Outstanding Indebtedness carried by Persistent Revolvers (in Aug 2015), whilst 67% circa of Credit Cardholders Transactors enjoy a Free Ride with their Revolving Lines of Credit

The Four Pillars enjoy 80% of the Credit Card Market.  The below 'repeat' of the further above extract from 5. IMPACT ANALYSIS of RBA 2002 evidences that the Scheme Providers, as are the other parties under the Wholesale Supply Side, are masterly at concealing fundamental empirical evidence of the break-up of aggregate Credit Card Revenues.  Notwithstanding that there have been over 100 voluminous 'Submissions', 'Reviews', 'Reports', 'Discussion Papers', 'Staff Working Papers' and 'Enquiries' on Credit Cards by RBA, ABA, banks, Credit Card Networks, Senate Committees, regulators, Treasury, Australian Retailers Association 'et al' in the last 10 years.

The Reserve Bank's Submission to the Financial System Inquiry - March 2014 noted:

"In 1998, the government implemented a range of reforms that were generally in line with the broad structure and powers recommended by the Wallis Committee. The responsibility for oversight of the payments system was entrusted to the PSB.  The PSB’s responsibilities and powers are set out under four key pieces of legislation:
*        Reserve Bank Act 1959,
*        Payment Systems (Regulation) Act 1998 (the PSRA),
*        the Payment Systems and Netting Act 1998 (the PSNA), and
*        Part 7.3 of the Corporations Act."

"The Reserve Bank’s policy-making role is one of the four different roles of the Bank in the payments system (see ‘Box 8A: The Roles of the Reserve Bank in the Payments System’).  The Reserve Bank is the principal regulator of the payments system through the PSB.  Payments Policy Department has responsibility for providing advice to the PSB."

"The Payment Systems (Regulation) Act 1998 gives the Reserve Bank of Australia 'extensive powers' to gather information from a payment system or from individual participants."  "The Payments System Board was established by the Commonwealth Govt. in 1998 so as to best contribute to: .......... and promoting competition in the market for payment services."

As elaborated in Chapter 15 below, Section 10(2) of the Payment Systems (Regulation) Act 1998 says:

‘It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to ...........the economic prosperity and welfare of the people of Australia.

The Reserve Bank can exercise its "...extensive powers" under the Payment Systems (Regulation) Act 1998 to "gather information from payment system participants and operators" by requesting each of the Four Pillars to provide (to the Reserve Bank) financial information of their combined Credit Card Products for the financial year ended 30 June 2016 which enables the Reserve Bank to present to the Australian Parliament the -

(i)       same style 'pie charts' for "Card Issuers' Revenue" [that quantifies at least seven revenue sources] and "Card Issuers' Costs" [that quantifies at least five costs, which include Rewards Programs] that is displayed in Chapter 8;

(ii)      same style "annual Report to the Congress on the Profitability of Credit Card Operations of Depository Institutions (displayed in Chapter 8) that the Board of Governors of the U.S. Federal Reserve provided to the US Congress for annual financial accounts as at June 2016;

(iii)     annual cost of Rewards Programme and the contribution to this annual cost from Interchange Fees; and

(iv)     aggregate and the percentage of gross interest revenue that is paid by the highest paying 20% of Interest paying Credit Cardholders to assist appraisal of the application of the User Pays Principle for Credit Cardholders that hold over 16 million Credit Cards in Australia.

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